Item 1A. RISK FACTORS

You

should carefully consider the following risk

factors in addition to the other information

included in this

Annual Report on Form 10-K.

These risk factors are not the only risks

we face.

Our business could also be

affected by additional risks and uncertainties not currently

known to us or that we currently consider to be

immaterial.

If any of these risks were to occur, our business, operating results and financial

condition, as well

as the value of an investment in our common

stock could be adversely affected.

Our operating results, our future rate of growth

and the carrying value of our assets are exposed

to the

effects of changing commodity prices.

Prices for crude oil, bitumen, natural gas, NGLs and

LNG can fluctuate widely.

Brent crude oil prices

averaged $64 per barrel in 2019, ranging from

a low of $53 per barrel in January to a high of almost

$75 per

barrel in April.

Given volatility in commodity price drivers

and the worldwide political and economic

environment generally, as well as increased uncertainty generated by recent (and

potential future) armed

hostilities in various oil-producing regions around the

globe, price trends may continue to be volatile.

Our

revenues, operating results and future rate of growth

are highly dependent on the prices

we receive for our

crude oil, bitumen, natural gas, NGLs and

LNG.

The factors influencing these prices are

beyond our control.

Lower crude oil, bitumen, natural gas, NGL and

LNG prices may have a material adverse effect on our

revenues, operating income, cash flows and liquidity, and may also affect the amount

of dividends we elect to

declare and pay on our common stock and the

amount of shares we elect to acquire as

part of the share

repurchase program and the timing of such acquisitions.

Lower prices may also limit the amount of reserves

we can produce economically, adversely affecting our proved reserves, reserve replacement

ratio and

accelerating the reduction in our existing reserve levels

as we continue production from upstream

fields.

Significant reductions in crude oil, bitumen, natural

gas, NGLs and LNG prices could also require

us to reduce

our capital expenditures, impair the carrying value

of our assets or discontinue the classification

of certain

assets as proved reserves.

In the past three years, we recognized several

impairments, which are described in

Note 9—Impairments and the “APLNG” section

of Note 6—Investments, Loans and Long-Term Receivables,

in the Notes to Consolidated Financial Statements.

If commodity prices remain low relative

to their historic

levels, and as we continue to optimize our investments

and exercise capital flexibility, it is reasonably likely

we will incur future impairments to long-lived assets

used in operations, investments in nonconsolidated

entities accounted for under the equity method and

unproved properties.

Although it is not reasonably

practicable to quantify the impact of any future

impairments at this time, our results of operations

could be

adversely affected as a result.

Our ability to declare and pay dividends and repurchase

shares is subject to certain considerations.

Dividends are authorized and determined by

our Board of Directors in its sole discretion

and depend upon a

number of factors, including:

●

Cash available for distribution.

●

Our results of operations and anticipated future

results of operations.

●

Our financial condition, especially in relation

to the anticipated future capital needs of our

properties.

●

The level of distributions paid by comparable companies.

●

Our operating expenses.

●

Other factors our Board of Directors deems

relevant.

We expect to continue to pay quarterly dividends to our stockholders; however, our Board of Directors may

reduce our dividend or cease declaring dividends

at any time, including if it determines that

our net cash

provided by operating activities,

after deducting capital expenditures and investments,

are not sufficient to pay

our desired levels of dividends to our stockholders

or to pay dividends to our stockholders at all.

Additionally, as of December 31, 2019, $5.4 billion of repurchase authority

remained of the $15 billion share

repurchase program our Board of Directors had

authorized.

In February, 2020, our Board of Directors

approved an increase to our repurchase authorization

from $15 billion to $25 billion, to support

our plan for

future share repurchases.

Our share repurchase program does not obligate

us to acquire a specific number of

shares during any period, and our decision to

commence, discontinue or resume repurchases

in any period will

depend on the same factors that our Board of

Directors may consider when declaring dividends,

among others.

Any downward revision in the amount of dividends

we pay to stockholders or the number of shares

we

purchase under our share repurchase program could

have an adverse effect on the market price of our common

stock.

We may need additional capital in the future, and it may not be available on acceptable

terms.

We have historically relied primarily upon cash generated by our operations to fund

our operations and

strategy; however, we have also relied from time to time on access to

the debt and equity capital markets for

funding.

There can be no assurance that additional debt

or equity financing will be available in the future

on

acceptable terms, or at all.

In addition, although we anticipate we

will be able to repay our existing

indebtedness when it matures or in accordance

with our stated plans, there can be no assurance

we will be able

to do so.

Our ability to obtain additional financing, or

refinance our existing indebtedness when it matures

or

in accordance with our plans, will be subject to a

number of factors, including market conditions,

our operating

performance, investor sentiment and our ability

to incur additional debt in compliance with agreements

governing our then-outstanding debt.

If we are unable to generate sufficient funds from

operations or raise

additional capital for any reason, our business could

be adversely affected.

In addition, we are regularly evaluated by the major

rating agencies based on a number of factors,

including

our financial strength and conditions affecting the oil

and gas industry generally.

We and other industry

companies have had their ratings reduced in the

past due to negative commodity price outlooks.

Any

downgrade in our credit rating or announcement

that our credit rating is under review for possible

downgrade

could increase the cost associated with any additional

indebtedness we incur.

Our business may be adversely affected by deterioration

in the credit quality of, or defaults under our

contracts with, third parties with whom we do

business.

The operation of our business requires us to engage

in transactions with numerous counterparties

operating in a

variety of industries, including other companies

operating in the oil and gas industry.

These counterparties

may default on their obligations to us as a result

of operational failures or a lack of liquidity, or for other

reasons, including bankruptcy.

Market speculation about the credit quality

of these counterparties, or their

ability to continue performing on their existing obligations,

may also exacerbate any operational difficulties

or

liquidity issues they are experiencing, particularly

as it relates to other companies in the oil and gas industry

as

a result of the volatility in commodity prices.

Any default by any of our counterparties may

result in our

inability to perform our obligations under agreements

we have made with third parties or may otherwise

adversely affect our business or results of operations.

In addition, our rights against any of our counterparties

as a result of a default may not be adequate to

compensate us for the resulting harm caused

or may not be

enforceable at all in some circumstances.

We may also be forced to incur additional costs as we attempt to

enforce any rights we have against a defaulting

counterparty, which could further adversely impact our results

of operations.

In particular, in August 2018, we entered into a settlement

agreement with Petróleos de Venezuela, S.A.

(PDVSA) providing for the payment of approximately

$2 billion over a five-year period in connection

with an

arbitration award issued by the International

Chamber of Commerce (ICC) Tribunal in favor of ConocoPhillips

on a contractual dispute arising from Venezuela’s expropriation of our interests in the Petrozuata and Hamaca

heavy oil ventures and other pre-expropriation

fiscal measures.

We collected approximately $0.8 billion of the

$2.0 billion settlement in 2018 and 2019.

PDVSA has defaulted on its remaining payment

obligations under

this agreement, we are therefore now forced to

incur additional costs as we seek to recover any

unpaid amounts

under the agreement.

Unless we successfully add to our existing proved

reserves, our future crude oil, bitumen,

natural gas and

NGL production will decline, resulting in an

adverse impact to our business.

The rate of production from upstream fields

generally declines as reserves are depleted.

If we do not conduct

successful exploration and development activities,

or, through engineering studies, optimize production

performance or identify additional or secondary

recovery reserves, our proved reserves

will decline materially

as we produce crude oil, bitumen, natural gas and

NGLs, and our business will experience reduced cash

flows

and results of operations.

Any cash conservation efforts we may undertake as a result

of commodity price

declines may further limit our ability to replace

depleted reserves.

The exploration and production of oil and gas

is a highly competitive industry.

The exploration and production of crude oil,

bitumen, natural gas and NGLs is a highly

competitive business.

We compete with private, public and state-owned companies in all facets of the

exploration and production

business, including to locate and obtain new

sources of supply and to produce oil, bitumen,

natural gas and

NGLs in an efficient, cost-effective manner.

Some of our competitors are larger and have greater

resources

than we do or may be willing to incur a higher

level of risk than we are willing to incur to obtain

potential

sources of supply.

If we are not successful in our competition

for new reserves, our financial condition and

results of operations may be adversely affected.

Any material change in the factors and assumptions

underlying our estimates of crude oil, bitumen,

natural

gas and NGL reserves could impair the quantity

and value of those reserves.

Our proved reserve information included in this annual

report represents management’s best estimates based

on assumptions, as of a specified date, of the volumes

to be recovered from underground accumulations of

crude oil, bitumen, natural gas and NGLs.

Such volumes cannot be directly measured

and the estimates and

underlying assumptions used by management are

subject to substantial risk and uncertainty.

Any material

changes in the factors and assumptions underlying

our estimates of these items could result

in a material

negative impact to the volume of reserves reported

or could cause us to incur impairment expenses

on property

associated with the production of those reserves.

Future reserve revisions could also result

from changes in,

among other things, governmental regulation.

We expect to continue to incur substantial capital expenditures and operating

costs as a result of our

compliance with existing and future environmental

laws and regulations.

Our business is subject to numerous laws and regulations

relating to the protection of the environment, which

are expected to continue to have an increasing

impact on our operations in the U.S. and in other

countries in

which we operate.

For a description of the most significant of these

environmental laws and regulations, see

the “Contingencies—Environmental” section

of Management’s Discussion and Analysis of Financial

Condition and Results of Operations.

These laws and regulations continue to increase

in both number and

complexity and affect our operations with respect to, among

other things:

●

Permits required in connection with exploration,

drilling, production and other activities.The

discharge of pollutants into the environment.

●

Emissions into the atmosphere, such as nitrogen

oxides, sulfur dioxide, mercury and GHG emissions.

●

Carbon taxes.

●

The handling, use, storage, transportation, disposal

and cleanup of hazardous materials and hazardous

and nonhazardous wastes.

●

The dismantlement, abandonment and restoration

of our properties and facilities at the

end of their

useful lives.

●

Exploration and production activities in

certain areas, such as offshore environments, arctic fields,

oil

sands reservoirs and unconventional plays.

We have incurred and will continue to incur substantial capital, operating and maintenance,

and remediation

expenditures as a result of these laws and regulations.

Any failure by us to comply with existing

or future

laws, regulations and other requirements could result

in administrative or civil penalties, criminal

fines, other

enforcement actions or third-party litigation

against us.

To the extent these expenditures, as with all costs, are

not ultimately reflected in the prices of our products

and services, our business, financial

condition, results of

operations and cash flows in future periods could

be materially adversely affected.

Existing and future laws, regulations and initiatives

relating to global climate change, such as limitations

on GHG emissions, may impact or limit

our business plans, result in significant expenditures,

promote

alternative uses of energy or reduce demand

for our products.

Continuing political and social attention to the

issue of global climate change has resulted in

both existing and

pending international agreements and national,

regional or local legislation and regulatory

measures to limit

GHG emissions, such as cap and trade regimes, carbon

taxes, restrictive permitting, increased fuel efficiency

standards and incentives or mandates for renewable

energy.

For example, in December 2015, the U.S. joined

the international community at the 21st Conference

of the Parties of the United Nations Framework

Convention on Climate Change in Paris that

prepared an agreement requiring member countries

to review and

represent a progression in their intended GHG

emission reduction goals every five years

beginning in 2020.

While the U.S. announced its intention to withdraw

from the Paris Agreement, there is no guarantee

that the

commitments made by the U.S. will not be implemented,

in whole or in part, by U.S. state and local

governments or by major corporations headquartered

in the U.S.

In addition, our operations continue in

countries around the world which are party to,

and have not announced an intent to

withdraw from, the Paris

Agreement.

The implementation of current agreements and

regulatory measures, as well as any future

agreements or measures addressing climate

change and GHG emissions, may adversely

impact the demand for

our products, impose taxes on our products or operations

or require us to purchase emission credits

or reduce

emission of GHGs from our operations.

As a result, we may experience declines in commodity

prices or incur

substantial capital expenditures and compliance,

operating, maintenance and remediation costs,

any of which

may have an adverse effect on our business and results

of operations.

Additionally, increasing attention to global climate change has resulted in pressure

upon shareholders,

financial institutions and/or financial markets

to modify their relationships with oil and gas companies

and to

limit investments and/or funding to such companies,

which could increase our costs or otherwise

adversely

affect our business and results of operations.

Furthermore, increasing attention to global climate

change has resulted in an increased likelihood of

governmental investigations and private litigation,

which could increase our costs or otherwise adversely

affect

our business.

In 2017 and 2018, cities, counties, and

a state government in California, New

York, Washington,

Rhode Island and Maryland, as well as the Pacific

Coast Federation of Fishermen’s Association, Inc., filed

lawsuits against oil and gas companies, including

ConocoPhillips, seeking compensatory damages

and

equitable relief to abate alleged climate change impacts.

ConocoPhillips is vigorously defending against

these

lawsuits.

The ultimate outcome and impact to us

cannot be predicted with certainty, and we could incur

substantial legal costs associated with defending

these and similar lawsuits in the future.

In addition, although

we design and operate our business operations

to accommodate expected climatic

conditions, to the extent there are significant

changes in the earth’s climate, such as more severe or frequent

weather conditions in the markets where we operate

or the areas where our assets reside, we could incur

increased expenses, our operations could be adversely

impacted, and demand for our products could

fall.

For more information on legislation or precursors

for possible regulation relating to global climate

change that

affect or could affect our operations and a description of the company’s response, see the

“Contingencies—

Climate Change” section of Management’s Discussion and Analysis

of Financial Condition and Results of

Operations.

Domestic and worldwide political and economic

developments could damage our operations and materially

reduce our profitability and cash flows.

Actions of the U.S., state, local and foreign

governments, through sanctions, tax and other

legislation,

executive order and commercial restrictions,

could reduce our operating profitability both

in the U.S. and

abroad.

In certain locations, governments have imposed

or proposed restrictions on our operations;

special

taxes or tax assessments; and payment transparency

regulations that could require us to disclose

competitively

sensitive information or might cause us to violate

non-disclosure laws of other countries.

One area subject to significant political

and regulatory activity is the use of hydraulic

fracturing, an essential

completion technique that facilitates production

of oil and natural gas otherwise trapped in lower

permeability

rock formations.

A range of local, state, federal and national laws

and regulations currently govern or, in some

hydraulic fracturing operations, prohibit hydraulic

fracturing in some jurisdictions.

Although hydraulic

fracturing has been conducted for many decades,

a number of new laws, regulations and permitting

requirements are under consideration by the

U.S. EPA and others which could result in increased costs,

operating restrictions, operational delays or limit

the ability to develop oil and natural gas resources.

Certain

jurisdictions in which we operate, including state

and local governments in Colorado, have adopted

or are

considering regulations that could impose new

or more stringent permitting, disclosure

or other regulatory

requirements on hydraulic fracturing or other oil

and natural-gas operations, including subsurface

water

disposal.

In addition, certain interest groups have also

proposed ballot initiatives and constitutional

amendments designed to restrict oil and natural-gas

development generally and hydraulic fracturing

in

particular.

For example, in 2018, Colorado voters rejected

Proposition 112, a Colorado ballot initiative that

would have drastically limited the use of hydraulic

fracturing in Colorado.

In the event that ballot initiatives,

local or state restrictions or prohibitions are

adopted and result in more stringent limitations

on the production

and development of oil and natural gas in areas

where we conduct operations, we may incur significant

costs to

comply with such requirements or may experience

delays or curtailment in the permitting

or pursuit of

exploration, development or production activities.

Such compliance costs and delays, curtailments,

limitations

or prohibitions could have a material adverse

effect on our business, prospects, results of operations, financial

condition and liquidity.

The U.S. government can also prevent or restrict

us from doing business in foreign countries.

These

restrictions and those of foreign governments

have in the past limited our ability to

operate in, or gain access

to, opportunities in various countries.

Actions by host governments, such as the expropriation

of our oil assets

by the Venezuelan government, have affected operations significantly in the past and may continue to

do so in

the future.

Changes in domestic and international regulations

may affect our ability to collect payments such

as those pertaining to the settlement with PDVSA

or the ICSID Award against the Government of Venezuela;

or to obtain or maintain permits, including those

necessary for drilling and development of wells

in various

locations.

Local political and economic factors in international

markets could have a material adverse effect on us.

Approximately 50 percent of our hydrocarbon

production was derived from production outside

the U.S. in

2019, and 39 percent of our proved reserves, as

of December 31, 2019, were located outside

the U.S.

We are

subject to risks associated with operations in international

markets, including changes in foreign governmental

policies relating to crude oil, natural gas, bitumen,

NGLs or LNG pricing and taxation, other

political,

economic or diplomatic developments (including

the effect of international trade discussion and disputes),

changing political conditions and international

monetary and currency rate fluctuations.

In addition, some

countries where we operate lack a fully independent

judiciary system.

This, coupled with changes in foreign

law or policy, results in a lack of legal certainty that exposes our operations to

increased risks, including

increased difficulty in enforcing our agreements in those

jurisdictions and increased risks of adverse

actions by

local government authorities, such as expropriations.

Our business may be adversely affected by price controls,

government-imposed limitations on production

of

crude oil, bitumen, natural gas and NGLs, or the

unavailability of adequate gathering, processing,

compression, transportation, and pipeline

facilities and equipment for our production

of crude oil, bitumen,

natural gas and NGLs.

As discussed above, our operations are subject

to extensive governmental regulations.

From time to time,

regulatory agencies have imposed price controls

and limitations on production by restricting

the rate of flow of

crude oil, bitumen, natural gas and NGL wells

below actual production capacity.

Because legal requirements

are frequently changed and subject to interpretation,

we cannot predict whether future restrictions

on our

business may be enacted or become applicable to

us.

Our ability to sell and deliver the crude oil, bitumen,

natural gas, NGLs and LNG that we produce

also

depends on the availability, proximity, and capacity of gathering, processing, compression, transportation

and

pipeline facilities and equipment, as well as any necessary

diluents to prepare our crude oil, bitumen, natural

gas, NGLs and LNG for transport.

The facilities, equipment and diluents we rely

on may be temporarily

unavailable to us due to market conditions, extreme

weather events, regulatory reasons, mechanical

reasons or

other factors or conditions, many of which are

beyond our control.

In addition, in certain newer plays, the

capacity of necessary facilities, equipment and diluents

may not be sufficient to accommodate production

from

existing and new wells, and construction and permitting

delays, permitting costs and regulatory or other

constraints could limit or delay the construction,

manufacture or other acquisition of new facilities

and

equipment.

If any facilities, equipment or diluents, or

any of the transportation methods and channels

that we

rely on become unavailable for any period of time,

we may incur increased costs to transport

our crude oil,

bitumen, natural gas, NGLs and LNG for sale or

we may be forced to curtail our production

of crude oil,

bitumen, natural gas or NGLs.

Our investments in joint ventures decrease

our ability to manage risk.

We conduct many of our operations through joint ventures in which we may share

control with our joint

venture partners.

There is a risk our joint venture participants may

at any time have economic, business or

legal interests or goals that are inconsistent with

those of the joint venture or us, or our joint

venture partners

may be unable to meet their economic or other

obligations and we may be required to

fulfill those obligations

alone.

Failure by us, or an entity in which we have

a joint venture interest, to adequately manage

the risks

associated with any operations, acquisitions or

dispositions could have a material adverse effect on the

financial condition or results of operations of our

joint ventures and, in turn, our business and operations.

We may not be able to successfully complete any disposition we elect to pursue.

From time to time, we may seek to divest portions

of our business or investments that

are not important to our

ongoing strategic objectives.

Any dispositions we undertake may involve numerous

risks and uncertainties,

any of which could adversely affect our results of operations

or financial condition.

In particular, we may not

be able to successfully complete any disposition

on a timeline or on terms acceptable

to us, if at all, whether

due to market conditions, regulatory challenges

or other concerns.

In addition, the reinvestment of capital

from disposition proceeds may not ultimately

yield investment returns in line with our internal

or external

expectations.

Any dispositions we pursue may also result in

disruption to other parts of our business,

including through the diversion of resources

and management attention from our ongoing

business and other

strategic matters, or through the disruption

of relationships with our employees and key

vendors.

Further, in

connection with any disposition, we may enter into

transition services agreements or undertake

indemnity or

other obligations that may result in additional

expenses for us.

We may also be required under applicable

accounting rules to recognize impairments

associated with any disposition we pursue,

whether or not

completed.

As part of our disposition strategy, on May 17, 2017, we completed the sale of

our 50 percent nonoperated

interest in the FCCL Partnership, as well as the

majority of our western Canada gas assets

to Cenovus Energy.

Consideration for the transaction included 208

million Cenovus Energy common shares.

We may not be able

to liquidate the shares issued to us by Cenovus

Energy at prices we deem acceptable, or at all.

Our operations present hazards and risks that

require significant and continuous oversight.

The scope and nature of our operations present

a variety of significant hazards and risks, including

operational

hazards and risks such as explosions, fires,

crude oil spills, severe weather, geological events, labor disputes,

armed hostilities, terrorist attacks, sabotage, civil

unrest or cyber attacks.

Our operations may also be

adversely affected by unavailability, interruptions or accidents involving services

or infrastructure required to

develop, produce, process or transport our production,

such as contract labor, drilling rigs, pipelines, railcars,

tankers, barges or other infrastructure.

Our operations are subject to the additional hazards

of pollution,

releases of toxic gas and other environmental hazards

and risks.

Offshore activities may pose incrementally

greater risks because of complex subsurface

conditions such as higher reservoir pressures,

water depths and

metocean conditions.

All such hazards could result in loss of human

life, significant property and equipment

damage, environmental pollution, impairment

of operations, substantial losses to us and damage to

our

reputation.

Further, our business and operations may be disrupted if

we do not respond, or are perceived not to

respond, in an appropriate manner to any of these hazards

and risks or any other major crisis or if

we are

unable to efficiently restore or replace affected operational

components and capacity.

Our technologies, systems and networks may be subject

to cyber attacks.

Our business, like others within the oil and gas

industry, has become increasingly dependent on digital

technologies, some of which are managed by third-party

service providers on whom we rely to

help us collect,

host or process information.

Among other activities, we rely on digital technology

to estimate oil and gas

reserves, process and record financial and operating

data, analyze seismic and drilling information

and

communicate with employees and third parties.

As a result, we face various cyber security

threats such as

attempts to gain unauthorized access to, or control

of, sensitive information about our operations

and our

employees, attempts to render our data or systems

(or those of third parties with whom we do

business)

corrupted or unusable, threats to the security

of our facilities and infrastructure as well

as those of third parties

with whom we do business and attempted cyber

terrorism.

In addition, computers control oil and gas production,

processing equipment and distribution

systems globally

and are necessary to deliver our production to market.

A disruption, failure or a cyber breach of these

operating systems, or of the networks and infrastructure

on which they rely, many of which are not owned or

operated by us, could damage critical production,

distribution or storage assets, delay or prevent delivery

to

markets or make it difficult or impossible to accurately

account for production and settle transactions.

Although we have experienced occasional breaches

of our cyber security, none of these breaches have had a

material effect on our business, operations or reputation.

As cyber attacks continue to evolve, we must

continually expend additional resources to continue

to modify or enhance our protective measures

or to

investigate and remediate any vulnerabilities

detected.

Our implementation of various procedures

and controls

to monitor and mitigate security threats

and to increase security for our information, facilities

and

infrastructure may result in increased costs.

Despite our ongoing investments in security

resources, talent and

business practices, we are unable to assure that

any security measures will be effective.

If our systems and infrastructure were to be breached,

damaged or disrupted, we could be subject to serious

negative consequences, including disruption of

our operations, damage to our reputation,

a loss of counterparty

trust, reimbursement or other costs, increased compliance

costs, significant litigation exposure and legal

liability or regulatory fines, penalties or intervention.

Any of these could materially and adversely affect our

business, results of operations or financial condition.

Although we have business continuity plans in

place, our

operations may be adversely affected by significant and

widespread disruption to our systems and

infrastructure that support our business.

While we continue to evolve and modify our

business continuity

plans, there can be no assurance that they will

be effective in avoiding disruption and business impacts.

Further, our insurance may not be adequate to compensate

us for all resulting losses, and the cost to obtain

adequate coverage may increase for us in the future.